The US Federal Appeals Court on Tuesday (February 3) agreed to overturn last year’s ruling that granted the Department of Transportation (DOT) the authority to require airlines to disclose all fees to passengers when booking flights in advance.
The full panel of judges from the Fifth Circuit Court of Appeals (located in New Orleans) unanimously overturned a rule by the Department of Transportation, overturning a decision made in January 2025 by a three-judge panel.
Major US airlines challenged a rule issued by the Biden administration in April 2024. The rule required airlines and ticket agents to disclose “ancillary fees” such as baggage fees during the booking process. Airlines argued that federal law does not grant the Department of Transportation the power to issue such regulations.
In 2025, the Appeals Court stated that the Department of Transportation has the authority to establish rules to address unfair or deceptive practices by airlines, but the DOT did not follow procedural rules, so the case was remanded to the Department of Transportation for review.
American Airlines, United Airlines, Delta Air Lines, JetBlue, and Alaska Airlines, as well as industry groups Airlines for America and the International Air Transport Association, stated that the regulatory requirement “undermines the way airlines interact with customers, is costly, and provides no proven benefits.”
The regulation issued by the Department of Transportation in April 2024 required airlines and ticket agents to disclose service fees in the ticket price to help consumers avoid unnecessary or unexpected charges. The Department of Transportation stated that passengers often unexpectedly pay higher fees when checking bags at the airport, resulting in an additional $543 million in payments annually, which generates extra revenue for airlines.
Airlines stipulated that if passengers did not pay baggage fees in advance or waited until just before the flight to pay, they would be charged higher baggage fees. Several airlines increased baggage fees in 2024, with the total baggage fees collected amounting to $7.3 billion, higher than $7.1 billion in 2023.
(This article referenced a report from Reuters)